“Over the course of American history, we have seen inflection points where policymakers had the courage to think big and act big to address longstanding flaws in the prevailing economic landscape,” Yellen said. “We face a similarly significant moment today where Congress can think big and act big to decisively send us down a better path.”
Yellen said that all the investments would be fully paid for through higher taxes on large, profitable corporations, improved enforcement of the existing tax system and savings from reforms to government health care programs.
However, the Biden “Build Back Better” program is facing strong opposition from Republicans who contend that the $3.5 trillion price tag is too high and who object to the increased taxes.
In a question and answer session, Yellen defended the administration's efforts to establish a global corporate minimum tax, something that Republicans on Capitol Hill have opposed.
“If you look at corporate tax rates globally, you see a steady downward progression over decades,” Yellen said. "That reflects a competitive race to the bottom."
Yellen said the administration is close to getting support from 140 countries to establish a minimum corporate tax of at least 15%. She said countries that seek to be tax havens such as Ireland, Estonia and Hungary have refused to join in this agreement but “we are working hard to find ways to bring them on board.”
She said she hoped to get a political endorsement from world leaders at a meeting of the Group of 20 major industrial countries in late October. She said provisions for changes that need to be made in U.S. law have been included in the $3.5 trillion spending plan the administration is trying to push through Congress relying only on Democratic votes.